Fewer incentives offered in May

Fewer incentives offered in MayIncentives for new cars fell in the month of May, according to Edmunds, making it more difficult to score vehicles at a discount.

The auto website reports that the average discount for new cars was $2,002 in May, which is down $107 from April. That's down even sharper from a year ago, when the average incentive rate was $2,697.

A number of factors have contributed to the lower incentives, including the fact that automakers ramped up discounts throughout the beginning of the year. Since then, the decreased production as a result of the Japanese earthquake have caused automakers to scale back a bit.

Another reason is that many buyers are now shopping smaller, high-MPG vehicles, which typically carry lower price tags anyways. Automakers can't offer big discounts on these cars, as they have slim profit margins to begin with.

"The continuing market shift toward small fuel-efficient vehicles is keeping overall auto maker incentives at the lowest levels we've seen in years," said Jessica Caldwell, an analyst for Edmunds.

With incentives down lately, it's unlikely that drivers will be able to buy a vehicle outright. Fortunately, now is a great time to apply for bad credit auto loans, which can take the sting out of purchasing a vehicle.